What Are Closing Costs? Part 1: Recurring Closing Costs

This begins a five part series covering closings costs in Nevada real estate transactions. This series is prefaced with the fact that many closing costs are negotiable and customary costs can differ from city to city. This series is a general overview of what to expect at the closing table.

Part 1: Buyer’s Recurring Closing Costs

When purchasing a home in Reno and Sparks the buyer will not only pay for price of the home, via a loan, but will also incur costs for the process to be completed. The process fees for buyers can be broken down into two different categories: recurring and non-recurring closing costs.

Recurring closing costs are fees that are paid over and over for the length of time you have a loan and in some cases own the home. These are not only paid throughout your ownership of the home but are also partially paid upfront at the time of closing. Also known as “pre-paids”.

Among these, but not limited too, are:

• Homeowner’s Insurance (Including fire)
• Flood Insurance (Not applicable in all homes)
• Property Taxes
• MIP or PMI (Mutual or Private Insurance Premiums/Not always applicable)
• Prepaid Interest
• HOA Fee (Not applicable in all homes or loans)

Generally, your upfront payment of these fees will be held in an escrow account and put into your impound account upon closing. The fees are then used to pay their respective creditors throughout the loan and are replenished with your monthly mortgage payments. The amount of these fees can vary according the day you close, rate you get from a third party, type of loan, property tax amount, property amenities (pool, etc.), and how far along through the current tax period you are.

For a more detailed view of your recurring closing costs contact your lender or real estate agent and ask for a Good Faith Estimate or Estimated Net Sheet.

Click here for Part 2: Non-Recurring Closing Costs

To reduce liability from the sue happy: This is not intended to be a complete list of your closing costs. Your actual fees may be different as negotiated in your contract. Read your Purchase agreement and your lender’s documents carefully and make sure you understand the terms. You’re advised to consult legal counsel, a CPA, or financial advisor.

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